The Australian sharemarket struggled to a firmer finish today as bargain hunters bought the dip in the major banks and healthcare stocks.
The S&P-ASX 200 opened in the black but quickly fell into the red after Wall Street closed flat last night and the banks were hit by high cost estimates.
But after trading in and out of the red as Chinese stocks slipped ahead of the lunch break, it found some traction to close up 8.7 points, or 0.14 per cent, at 6049.8.
The major banks were under pressure early, but they recovered to finish firmer, after Morgan Stanley analysts said the upcoming reporting seas was the “calm before the storm as they faced $2 billion in costs fro customer refunds and remediation.
Global jitters eased as Italian government bond yields fell on hopes the government might pass a fiscal budget acceptable to the European Union.
Pressure from rising US borrowing costs eased as US 10-year bond yields dropped 4 points to 3.19 per cent after President Donald Trump said the said the Federal Reserve was moving too fast with interest-rate increases and dismissed concerns about inflation.
“I like low interest rates,” he said.
The Australian dollar extended its bounce, rising US0.4¢ to US71.20¢, while government 10-year yields dropped 2.9 points to 2.739 per cent.
The Shanghai composite index was down 0.2 per cent at the close of the ASX and the yuan was near two-year lows at 6.92 to the US dollar as the country remained in the grip of a funding crunch and fears about the ongoing risks from the US-China trade war.
AmpGFX currency strategist Greg Gibbs said recent Bloomberg reports of alleged Chinese state-sponsored hacking pointed to major long-lasting risks for Chinese industry.
“We wonder why major media outlets are not picking up on what is arguably the biggest global geopolitical scandal,” he said.
“Australian commodity prices continue to rise, but the AUD remains a proxy for heightened financial and economic risk in China. There is some evidence of peaking in the Australian economy.”